Johnson & Johnson exceeds expectations despite lowered profit forecast

In the third quarter of 2024, pharmaceutical giant Johnson & Johnson surprised with earnings of $2.42 per share, significantly surpassing the Zacks consensus estimate of $2.22. Despite the positive surprise, the company recorded a 9% decline in earnings compared to the previous year's period. Excluding one-time special charges, the reported earnings were $1.11 per share—a decrease of 34.3% year over year. Revenue of $22.47 billion, which exceeded the Zacks estimate of $22.19 billion, shows a revenue increase of 5.2% compared to the previous year's quarter. This growth is attributed to an operational increase of 6.3%, which was offset by a negative currency impact of 1.1%. Domestic market sales grew by 7.6% to $12.9 billion, and international markets increased by 2.2% to $9.56 billion. Since the spin-off of the consumer health segment, Johnson & Johnson has focused on the innovative medicines and medical technology sectors. The Innovative Medicines segment achieved an impressive $14.58 billion in revenue, particularly with standout products like Darzalex and Erleada. However, growing competition from generics is affecting the sales of drugs such as Zytiga and Remicade. In the MedTech sector, sales rose by 5.8% to $7.89 billion, although the company did not meet expectations in this area. Despite the forecasted overall revenue increases in 2024, Johnson & Johnson has lowered its profit forecast due to expenses related to corporate acquisitions. Uncertainty regarding pending legal disputes and the market introduction of generics continues to pose a challenge.